Regional development: Size not the issue

By JOHN JOZSAPublished January 30, 2013 - 5:38pm Last Updated January 31, 2013 - 7:27am

Average: 3.1(14 votes)

I don’t mean to be harsh, but the Jan. 23 editorial “Rural development: Growing horizons” is off the mark in many ways. I’ll pick just one. For some context, I have 35-plus years of experience in regional economic development planning. I’ve worked in every county in Nova Scotia and in every province, as well as in the Asian sub-continent and Africa.

The editorial writer’s assumption that organizations that represent larger constituencies will find it easier to make an impression on the world stage is, I believe, correct in a general sense. However, the application of it to assess the relative effectiveness of attracting investment to rural areas by 12 regional agencies versus the six proposed by the province is not correct, for the following reasons:

1. Regional development agencies (RDAs) were established primarily to facilitate community-based efforts. They were intended to complement the broader scope and reach of the Nova Scotia government’s investment attraction efforts, and to lever off of the results of those efforts.

2. It is a truism that roughly 80 per cent of business investment in a region comes from people already living or invested in the region. Agency staff are generally aware of this.

3. The staff of regional development agencies (I’ve worked with almost all of them) by and large do a good job of improving the local conditions for growth, marketing the value proposition of their respective areas, and levering off of out-of-province prospects turned up by the efforts of government departments and agencies.

4. An RDA that represents 80,000 people will have no more presence, in any practical sense of the term, than one representing 40,000 people. Regional development agency staff whom I know already know this. The reality is that Nova Scotia is just a speck on the world competition stage, so 80,000 is just a speck on a speck.

5. Most regional development agencies have more than one municipal member. Municipal governments that are members of RDAs have always been willing to co-operate until the rubber hits the road and an investor from within or outside the region needs a specific site to locate. The co-operation ends and the beggar-thy-neighbour race to the bottom begins. I’ve seen this time and time and time again.

(I worked as part of Costco’s consulting team when it decided to open in the Halifax/Dartmouth/Bedford market, pre-amalgamation. Halifax and Dartmouth could barely stop offering perks to Costco to get it to locate in their city. The economy of Halifax/Dartmouth/Bedford gave up revenue unnecessarily because Costco was coming here regardless. As a consultant to Costco, I was glad to see my client strengthening its business proposition. As a resident of Nova Scotia, I was depressed as I saw money leave the area that did not have to leave.)

6. Staff at the regional development agencies are powerless to prevent unhelpful competition between their municipal members because the governance models of the RDAs prevent them from recommending to a prospect a location in one municipal unit or another within their agency’s boundaries. The governance models are supportive of high-level marketing and region-wide efforts to improve the conditions for growth. But they do not give staff the latitude to “close a deal.”

(Actually, what I have seen is that when a staff person at a regional development agency has enough substance to be assured of finding a job elsewhere, that person will risk the wrath of politicians on the agency’s board and help an investor choose the best location in the agency area. Such actions are necessary to land a prospect and avoid give-aways by competing municipal units. But with the current governance models, these actions are career-limiting moves for staff. Staff who have options tend to do what’s best for the region’s economy. Staff with fewer options have more variables to consider.)

Until the governance models of regional development agencies delegate authority to staff to not only promote and attract investment from within their area, but to help it locate within the regional development agency area (where there are several municipal units), the beggar-thy-neighbour activity will continue. If the agency areas are increased in size, and therefore in the number of municipal members, the only change will be the scale of the beggar-thy-neighbour activities.

Reducing the number of regional agencies makes sense as measure to accommodate the withdrawal of federal funding, but as it stands, that’s about it.